Israeli Army 2nd Lt Hadar Goldin who the army say was apparently captured by Hamas militants who came through a tunnel from the Gaza Strip (AP/YNet News)Smoke rises after another Israeli strike in Gaza City (AP)

Israeli forces, backed by heavy tank fire and air strikes, have moved deeper into southern Gaza in search of a soldier apparently captured in a clash with Hamas militants earlier in the day.

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Israeli forces search for soldier

Independent.ie

Israeli forces, backed by heavy tank fire and air strikes, have moved deeper into southern Gaza in search of a soldier apparently captured in a clash with Hamas militants earlier in the day.

At least 62 Palestinians and two Israeli soldiers were killed in the fierce fighting that quickly shattered a US-brokered ceasefire.

The truce collapsed less than two hours after it began. The Israeli Cabinet held a rare session after the start of the Jewish Sabbath to weigh up options, including whether to expand the 25-day-old operation against Hamas.

In Gaza's southern Rafah area, the military urged residents in phone calls to stay indoors as troops advanced.

"We are under fire. Every minute or so, tanks fire shells," said Ayman al-Arja, 45, a resident of the area.

Meanwhile, UN secretary-general Ban Ki-moon blamed Hamas for violating what was meant to be a three-day humanitarian ceasefire and demanded the immediate and unconditional release of the missing soldier.

Both Israel and Hamas accused each other of breaking the ceasefire, which had been announced by the US and the UN and took effect at 8.a.m.

The breakdown of the truce and the apparent capture of the Israeli soldier set the stage for a major escalation. The conflict has already devastated large swathes of the coastal area and killed at least 1,500 Palestinians, mainly civilians, according to Palestinian officials. Israel has lost 63 soldiers and three civilians.

An hour after the ceasefire started, gunmen emerged from one or more Gaza tunnels and opened fire at Israeli soldiers, with at least one of the militants detonating an explosives vest, said Israeli army spokesman Peter Lerner.

Hadar Goldin, a 23-year-old 2nd Lieutenent from the central Israeli town of Kfar Saba, was apparently captured during the ensuing mayhem and taken back into Gaza through a tunnel, while another two soldiers were killed.

"We suspect that he has been kidnapped," Col Lerner said.

The White House condemned the incident, describing it as an "absolutely outrageous" action by Hamas. Deputy national security adviser Josh Earnest said the soldier must be released immediately.

Israeli PM Benjamin Netanyahu told US secretary of state John Kerry in a telephone conversation that Palestinian militants had "unilaterally and grossly" violated the ceasefire and attacked Israeli soldiers.

"Israel will take all necessary steps against those who call for our destruction and perpetrate terrorism against our citizens," Mr Netanyahu told Mr Kerry, according to a statement from the prime minister's office.

Mark Regev, Mr Netanyahu's spokesman, said Hamas had "yet again thrown away a chance for a humanitarian relief for the people of Gaza, by deliberately violating this ceasefire".

Moussa Abu Marzouk, Hamas' deputy leader, told Al-Arabiya news channel from Cairo that the movement's military wing carried out no military operations after 8am, when the truce came into force.

If confirmed, Lt Goldin's capture could dramatically change the trajectory of the conflict. Any ceasefire efforts would likely be put on hold and Israel might instead expand its ground operation.

Israel has in the past gone to great lengths to return captured soldiers. In 2011, it traded hundreds of Palestinian prisoners for an Israeli soldier who had been captured by Hamas-allied militants in 2006.

A Hamas spokesman, Fawzi Barhoum, would neither confirm nor deny the capture, saying it was being used - along with news that two Israeli soldiers were killed in the Rafah area - as a cover for a "massacre".

The Israeli military said the heavy shelling in Rafah that followed was part of operational and intelligence activity designed to locate Lt Goldin.

A long-time friend of Lt Goldin's said he is engaged to get married and that he studied at a religious Jewish seminary in the West Bank settlement of Eli. Lt Goldin has a twin brother who is also in the military on the Gaza front-lines, said the friend.

The soldier's father, Simha Goldin, is a Tel Aviv University professor specialising in Ashkenazi Jewry, the friend said.

"We want to support the military in the fighting against Hamas in Gaza. We are sure the military will not stop before it turns over every stone in Gaza and returns Hadar home safe and sound," the father said in a brief statement to media outside his home.

The shelling in Rafah sent families fleeing from apartment blocks as pillars of smoke caused by the shelling rose from them. One woman carrying two children rushed toward a parked car. "Quickly, open the car door!" she yelled to a man standing nearby.

Ambulances ferried the wounded to Rafah's al-Najar hospital, where bloodied bodies on stretchers were carried inside and family members frantically searched for loved ones. Many of the wounded were children, their clothes stained with blood. In one hospital room, four children were treated on a single bed. Others were being examined on the floor.

The shelling killed at least 62 Palestinians and wounded at least 400 in Rafah, Gaza health official Ashraf al-Kidra said. Rescue workers were searching for people buried under the rubble, he added. He did not say whether those killed were civilians or militants.